Developer James Goyen sent a Sutherland Shire engineer to the Florida Keys in the USA to see what he envisaged for Sylvania Waters. Goyen eventually built more than eight kilometres of retaining wall to keep the sea at bay. He designed Sylvania Waters in such a way that the water could circulate with the tides to prevent rubbish accumulating. The first parcels of land went on sale in 1963, and three artificial islands were also created: Murray in 1964; Barcoo in 1967; and James Cook in the 1970s.
The naming of Sylvania is unclear, however, the translation of ‘sylvan’ means inhabiting the woods, relates to the setting of this suburb. The existence of a Sylvan Street, off Princes Highway, seems to confirm this. Thomas Holt (1811-1888) owned the land that stretched from Sutherland to Cronulla.
Holt had built Sutherland House on the foreshore of Gwawley Bay in 1818, on the eastern side of Sylvania. He established the Sutherland Estate Company in 1881 and a village grew there, with a post office opening in 1883. The school opened in 1884 but closed in 1891 and was not reopened until 1925. Sylvania Heights Public School opened in 1955.
Sylvania Waters Estate was developed by L.J.Hooker in the 1960s and land offered had water frontages with boating facilities. Streets were named after Australian rivers to emphasise the with water, such as Shoalhaven, Tweed, Murrumbidgee, Hawkesbury and Barwon.